Sogefi Group, which supplies suspension com-ponents, filtration and engine components, is

looking to have a larger presence in India. It aims to assist OEMs in the vehicle weight reduction efforts by offering up to 50 percent less weight in some of the sus-pension components made from composite material rather than metal without compromising on performance. The company is looking to invest around `60-65 crore in a phased manner over the coming years in its existing areas of business.

It recently inaugurated its new manufacturing facility, Allevard- IAI in Chakan, Pune for stabiliser and torsion bars. “The key issue, from the customers’ perspec-tives, with suspension parts is weight reduction. We are look-ing to offer suspension products made from composites and also evaluate other standard and

customised options for custom-ers,” said Chief Executive Officer, Sogefi Group, Emanuele Bosio. He added that Sogefi Group has been working on usage of newer mate-rial and process technologies with the aim of weight reduction while maintaining or improving per-formance. The Group is gradually looking to expand its presence by introducing new product tech-nologies and systems keeping in mind the market requirements and profitability.

He added that the market appears to be stagnant in most of the markets in Europe for the auto-motive sector. The Sogefi Group is looking to invest aggressively out-side the home market of Europe. It designs, develops and produc-es filtration systems, suspension components, air management and engine cooling systems. It entered into a 51: 49 JV with Allevard Rejna Autosuspensions and Imperial Auto India in 2010 to manufacture elastic suspension components for the Indian automotive sector. It is one of the few players to employ

hot and cold forming technology in the same facility. The compa-ny manufactured around 197,000 units last year and is looking to ramp up the capacity to around 745,000 units by 2015 in India.

The group has a presence in 16 countries with 44 manufacturing sites and 9 R&D centres. Sogofi Group’s Bangalore facility manu-factures engine filtration systems and products, while the Gurgaon facility supplies air & cooling sys-tems. The Pune facility has been set-up at a cost of around ̀ 25 crore. It will manufacture stabiliser bars

and torsion bars for passenger cars and utility vehicles.

It currently employs 75 peo-ple and will be doubled to 150 along with planned investment of `eight crore. It will cater to the requirements of Tata Motors, M&M, Fiat and Piaggio in addition to serving the needs of its global customers with Indian presence including GM, Renault-Nissan and Ford by providing local supply to their India and Asia Pacific facili-ties. “We will have access to the global VPN network (for FEA anal-ysis) and global testing laboratory in the group along with access to modern technologies of hot and cold forming processes under the same roof,” said MD, Allevard IAI Suspensions, Aman Mehtani.

The total group turnover in 2011 stood at around Euro 1.15 billion. The turnover also included revenues following the acquisition of SystèmesMoteurs and to the organic growth of the businesses of the group. The Group employs around 6,954 employees worldwide.

Auto Monitorwww.amonline.in9 July 2012Vol. 12 No. 20 32 Pages ` 50

I N D I A ’ S N O . 1 M A G A Z I N E F O R A U T O M O T I V E N E W S , V I E W S & A N A LY S I S

NEWS IN BRIEF

Philipp von Sahr to take over as BMW India head

Philipp von Sahr, 54, currently President of BMW Group Belgium-L u x e m bu r g , w i l l

succeed Dr Andreas Schaaf as President of BMW Group India (effective October 1, 2012). Born in 1958, Philipp von Sahr has com-pleted his MBA from University of Munich. He began his career with BMW A G i n Munich i n 1987. P r ior to joining BMW Group Belgium-Luxemburg, von Sahr was the Head of Sales for BMW Group Germany. Dr Andreas Schaaf will assume the new execu-tive position at BMW Group Headquarters in Munich.

Now Turns

Weekly

Mahindra 2 Wheelers recently kicked off its new Research and Development

centre in Pune and is looking to

invest around `100 crore every year, over the next four to five years to realise its objective of evolving as a research driven two wheeler manufacturer.

The division has developed two new engines—a four-stroke 110 cc air cooled SOHC engine and a four-stroke 300 cc liquid cooled four-valve DOHC engine with six speed transmission and electronic fuel injection. The engines would power a range of motorcycles and scooters over the next few years.

“We are looking to offer unmatched power and perform-ance for our range of scooters and motorcycles with customer centric product offerings,” said Head, Research and Development, Mahindra Two Wheelers, PS Ashok. He added that the R&D centre has been recognised by the Department of Science and Industrial Research (DSIR) and will enable Mahindra Two Wheelers to undertake in-house design and development of engine technology for its motorcycles as well.

“The centre is an important node in our ‘Research Neural Network’. Our R&D capability

with a global footprint and mar-ket-centric approach to product development will be the key to our success in the coming years,” said Vice Chairman and MD, M&M, Anand Mahindra.

The centre houses around 175 engineers and designers compris-ing two-wheeler experts who are leading various technology and product development projects. The new Duro DZ and the recent-ly launched Rodeo RZ with the all new ‘Z’ series engine were devel-oped at this facility. This engine series incorporates the pioneer-ing Dual Curve Digital Ignition (DCDI) technology and patented fuel level indication system.

“This multi-faceted R&D facil-ity boasts of advanced facilities in India including a design stu-dio, prototyping centre, engine development centre (EDC), CAE/CFD facility, fatigue test and reli-ability lab, and an electrical and electronics lab. The centre will develop prototypes and compo-nents from design to production, which will then be transferred to the company’s new production lines at Mahindra Two Wheelers’

Pithampur plant,” said Ashok.The centre houses a design

studio for visualisation, clay mock-ups and digitisation of new products. The development and testing centre will address various issues involved in the development of engines. This integrated centre will help the company to indigenously design, modify, develop, calibrate and evaluate existing as well as new

engines based on parameters like performance, reliability, legisla-tive and customer requirements. The centre’s CAE /CFD facilities (Computer Aided Engineering / Computational Fluid Dynamics) will provide Mahindra 2 Wheelers with the enhanced capability to capture realistic road conditions at the design stage through vari-ous advanced simulation tools and techniques.

Sogefi to consolidate Indian presence

M&M 2W develops new engines, kicks off R&D centre

Abhishek Parekh Pune

Our Bureau Mumbai

GLOBAL, REGIONAL COMPARISONS REVEAL UNTAPPED POTENTIAL IN LCVS

AUTONOMICS

Pg 14Pg 10MACHININGFOCUS

Top 5 3W Makers

Company May-11 May-12 Change

BAL 13,710 14,895 8.64%

Piaggio 13,910 13,390 -3.74%

M&M 4,498 4,320 -3.96%

Atul Auto 1,802 2,104 16.76%

TVS 934 1,215 30.09%

Top 5 3W-Exporters

Company May-11 May-12 Change

BAL 27,150 15,402 -43.27%

TVS 1,983 1,705 -14.02%

Piaggio 1,488 671 -54.91%

M&M 493 180 -63.49%

Force Motors 84 98 16.67%

* Source: SIAM/ ** Excluding exports/ *** all sub segments considered/ ^ excluding MRPL

DATA MONITOR

Emanuele Bosio, CEO, Sogefi Group

Anand Mahindra During The Inauguration Of The 2W R&D Centre In Pune

It is said that there is always an opportunity at the time of crisis. And the current crisis in both global and domestic economies can turn around as an opportu-nity. According to reports and views expressed by my

contacts in China, the wage costs in the country are fast increasing. And quite a few of my sources confirmed that the wage increases that have begun to make headlines from the end of last calendar year, are now getting aggressive. This phenomenon, coupled with the weakening rupee can become an opportunity for Indian exporters.

Well, you may ask where the market is. You could be par-tially right because of the poor off-take by many OEMs in Europe due to Euro zone crisis. However, what I feel is that this can actually turn in to an opportunity since many companies are forced to look at cost effective outsourcing options. Since India continues to be strong in high technol-ogy products, even though the Chinese are fast catching up, the appreciation of USD against Indian rupee and the soaring wage costs in China can make India cost competi-tive again. Though there are possibilities for the rupee to strengthen, even in the future, the wage cost in China will continue to lure the importers from the country to look at alternatives. It will be a good opportunity for Indian com-ponent manufacturers. Grab it!

According to the Chief Economic Advisor of the Union Finance Ministry, Kaushik Basu, the overall inflation is expected to go down from October with the advent of fes-tive season, from the current level of over 7.5 percent. His views or expectations on inflation were based on the whole-sale price index, which will continue to remain at the current level in the next three months. He also opined that the credit rating agencies such as S&P and Fitch downgrad-ing their outlook on India were mistakes on their part as he juxtaposed the statement with the fact that the country’s

economy has improved in the five-year period from fiscal 2007-08. While these words are encouraging, it is necessary to take in to account the ground realities. These statements by the rating firms had already begun affecting the inves-tors’ confidence in India and the repercussions could be very serious in the near future. Already the industrial production and the overall sentiments, driven by the Euro zone crisis, are low and it is evident in every industry. The dismal trend continues in the auto industry with passenger cars and com-mercial vehicles experiencing sluggish growth. Though the external factors are not directly affecting the industry, it gets affected due to low sentiments. The expected drop in infla-tion rates can do the magic of reviving the sales for the auto industry. Let us wait and watch.

Dear readers, the time has come to say goodbye to Auto Monitor. It has been a memorable inning for me especially when I was also part of the founding team over a decade ago. As the Editor in my second stint, I handled 41 editions. I was fortunate to have extraordinary colleagues who were a pillar of support through my tenure. We put in some new ideas leading to Auto Monitor becoming a weekly. Thanks again for constantly providing me the feedback that helped me understand your requirements. I will reach out to each of you soon and look forward to being in touch.

Wishing you much pleasure reading. Do send me your

feedback.

T. Murrali t.murrali@infomedia18.in

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Printed by Mohan Gajria and published & edited by Lakshmi Narasimhan on behalf of Infomedia 18 LimitedEditor: T. MurraliPrinted at Infomedia 18 Ltd, Plot no.3, Sector 7, off Sion-Panvel Road, Nerul, Navi Mumbai 400 706, and published at Infomedia 18 Ltd, ‘A’ Wing, Ruby House, J. K. Sawant Marg, Dadar (W), Mumbai - 400 028. AUTO MONITOR is registered with the Registrar of Newspapers of India under No. 67827/98. Views and opinions expressed in this publication are not necessarily those of Infomedia 18 Limited. Infomedia 18 Limited reserves the right to use the information published herein in any manner whatsoever. While every effort has been made to ensure accuracy of the information published in this edition, neither Infomedia 18 Ltd nor any of its employees accept any responsibility for any errors or omission. Further, Infomedia 18 Ltd does not take any responsibility for loss or damage incurred or suffered by any subscriber of this magazine as a result of his/her accepting any invitation/offer published in this edition. No part of this publication may be reproduced in any form without the written permission of the publisher. All rights reserved.

QUOTESBarack Obama, US President on China’s decision to impose tarrif barriers on US exports to that country

Anand Mahindra, M&M Vice Chairman on two-wheeler industry in Business Standard

“My administration took a new action to hold China accountable for unfair trade practices that harm American automakers. We’ll do just fine. But we’re going to make sure that competition is fair”

“We believe as markets evolve and change, if a new player wants to make an impact and become a significant contributor to the industry, what it needs is disruptive innovation and products, which is why we are here”

Auto Monitor

EDITORIAL

KOMMA keen on India for trade collaboration 10Korean machine tool manufactures are looking at India as a potential market for its growth and technology sharing

Why SIAM’s recall policy? 8Many questions remain unanswered as Society of Indian Automobile Manufacturers introduces Voluntary Code on Vehicle Recall

French Duster to wipe out existing SUV benchmarks 11Renault, which sold around 1,500 vehicles last year, hopes to gain a 20 times in sales this year and launched its compact SUV Duster recently

JCB launches 3DX Backhoe with new engine 11JCB’s 3DX backhoe loader claims 20 percent higher fuel efficiency in comparison to the previous model helping greater profitability to operators

Diesel & petrol preferred options over gaseous options 12Macro-economic uncertainties combined with constant rise in petrol prices and firm interest rates have pulled domestic growth levels in PV industry: CARE research

CONTENTS

THE OTHER SIDE

Visteon launches instrument cluster on Honda’s new scooter 18Visteon Corporation recently launched an electronic instrument cluster on Honda’s new scooter model, the VarioTechno 125 PGM-FI, in Indonesia

Diesel values retain price premium, but petrol holds its value better 20BCA data shows that while volume diesel cars enjoy a price premium over petrol in the wholesale market, their retained value is actually lower

Federal-Mogul introduces eco-friction brake pad materials 22Federal-Mogul has developed a range of zero-copper and low-copper brake pad formulations using a new tribological fingerprinting process

Chris You, Managing Director, Cobra CarbideChris You, who heads Cobra Carbide, has led the $60 million investment project of Korea’s YG Cutting Tools in India from May 2011

30

11

CORPORATE

GLOBAL WATCH

MACHINING

10

Auto Monitor

C O R P O R A T E89 JULY 2012

Ma ny quest ions remain unanswered as Society of Indian Automobile

Manufacturers (SIAM) introduc-es a Voluntary Code on Vehicle Recall. The move may either have been established to pro-tect the interest of the customers following pressures from the government, or it could be a step towards making the recall more acceptable in the market.

“Even if it helps in creating acceptability of the recall in the Indian market it would be a great achievement.” A senior official of SIAM told Auto Monitor. Under this policy, the vehicle manu-facturers may recall any product within seven years from the day of manufacturing to mend the potential safety defects in any vehicle. And if the OEMs fail to recall the product and if any defect is detected later on, then punitive action will be taken. With this provision, the confu-sion further deepens as SIAM doesn’t talk about any such body that may investigate the fault of a product and recommend penalty. “It’s mainly the OEMs who can detect the problem and that is why we have made it voluntary code,” President, SIAM, S Sandilya said.

The voluntary code comes in line with other countries such as the United Kingdom, Germany, Italy, Brazil and Australia where the manufactures initiate the recall. However, the United States is the only country that has a sep-arate body (National Highway Traffic Safety Administration) NHTSA, which takes the recall decisions.

Recall Policy Across World India is among the few grow-

ing automobile markets, which does not have an official vehi-cle recall policy. This means, no vehicles maker is bound to repair any manufacturing defect. The voluntary recall code makes it clear that recall will be limited to those defects in the vehicle, which were introduced during manufacturing and not because of normal wear-and-tear or due to improper handling of the vehicle.

In the United States, there is a well-defined mechanism to recall defective vehicles. Some other developed markets also have defined rules for recall. In the US, the National Highway Traffic Safety Administration can force a manufacturer to recall a model (or a certain batch), if safety stand-ards are proved to have not been met after an investigation by the agency.

However, the Indian car mak-

ers stick to self-regulation, and have virtually left it to each vehi-cle maker’s conscience to decide on their respective recall policies. Last year, the Sundar Committee Review had abstained from suggesting any official policy. However, it had recommended punishment for offences relat-ing to manufacturing of faulty vehicles through imprisonment of up to three months and/or a fine of up to `one lakh. But what is `one lakh for a manufacturer who may be selling cars at over `10 lakh each? Responding to the query, S Sandilya said, “Penality cannot do away with problems. The OEMs need to safeguard their image and they will take up self regulation.”

The move from the vehicle manufacturer might have come in the wake of MoRTH and the Heavy Industries Ministry plan-ning to form a mandatory auto recall policy by the end of this

year. The recall policy was also expected to be included in the amendment to the Motor Vehicle Act, 1988, which is currently enforced. Though, there has been some recall in the country by cer-tain manufacturers, they often shy away from terming it a ‘recall’.

The recall code is a uniform frame work for recalling the vehicles by vehicle manufactur-ers. The code is applicable on the registered passenger cars, two-wheelers and commercial vehicles. For CBU imports by member companies or independ-ent importers, the concerned importers shall bear the responsi-bility of enforcement of the code.

The Voluntary Code on Vehicle Recall will address poten-tial issues that exist in a motor vehicle, which do not meet the safety requirement due to manu-facturing defect and the remedial actions taken in this regard. The vehicle shall be covered under

safety recall for a period of seven years. The decision on recall will take into account accord-ing to the degree of seriousness or severity of occurrence of any possible hazard involved.

The code ensures that the recall information will also be posted on the company web-site and the communication will be received by the vehicle own-ers. The reported vehicle will be rectified by the manufacturer through its dealers at no cost to the customer. It was shared that the recall penetration rate may be improved by the correct infor-mation of vehicle owners

Further, in case a manufac-turer fails to announce recall where “clear evidence” is avail-able as per the recall definition and above guidelines, then Government of India/Ministry may issue appropriate directions to the vehicle manufacturers for such violation.

Why SIAM’s recall policy? Nabeel A Khan

New DelhiRecall Policy In Developed Markets Across Various Nations

Auto Monitor

C O R P O R A T E 99 JULY 2012

The Chenna i-based Wabco India Limited is likely to become a hub for certain family

of brake components and prod-ucts soon, with the successful localisation of valves for Anti-lock Braking System (ABS). The company is also working on devel-oping a new range of Electronic Braking Systems.

Director, Wabco India, P Kaniappan said, “We are working on few projects which may make Indian arm of Wabco unique. We can share the details only after few months. Currently, we are working with customers on EBS primarily on joint development programmes. We are already selling EBS, manufactured at our export oriented unit in Mahindra World City, near Chennai, for our customers who export their vehicles.”

About 15 years ago, the com-pany has set-up a proving ground in a 200-acre plot in Mappedu vil-lage, about 40 km from Chennai, to test brakes and ABS. The prov-ing ground has been supporting the company in terms of vehicle level development, validation and demonstration. Now, it is contem-plating on setting-up a circular track to test commercial vehi-cles for stability control systems. Primarily, the circular tracks are meant to test passenger cars at high speeds. “Now the proving ground and subsequent product developments are at global levels in nature because we are a Wabco

company,” he said. Regulation is necessary for ABS to take off and the company has been look-ing forward to it, he said. After the 2006 regulation that made ABS mandatory for commercial vehicles transporting hazardous goods, the concept took off.

On the benefits that the proving ground offered for the company in developing ABS, Kaniappan said that in order to develop the same, it is necessary to simulate certain conditions including different road surfac-es. It is not possible to go to other countries everytime for testing as it is expensive as well as time consuming. The test track helped in developing the products besides, testing and validating them. In addition, it also helped in homologating the vehicles that are running in the country now. It takes only about three days to validate ABS at the company’s test track against several weeks it the tests have to be carried out abroad. “We would not have met the 2006 regulations without the proving ground,” he said.

Established in 1962, as Sundaram Clayton, the joint ven-ture between TVS and Clayton Devandre to manufacture braking systems, the company developed ABS and the proving ground was constructed specifically for that purpose. Sundaram Clayton Limited(SCL) was demerged into Wabco-TVS (India) in 2008. Wabco took majority owner-ship in the following year. When it became a Wabco company it adopted the global company’s technology seamlessly.

When asked about the differ-ence between the ABS developed by erstwhile Sundaram Clayton and Wabco, Kaniappan said it was primarily on technology. What Sundaram Clayton devel-oped was the version-1 ABS while the contemporary product devel-oped by Wabco was version-3. Currently, Wabco India has reached to version-3 levels, while its parent company has moved to EBS. However, “What we are sell-ing to our customers in India is the same that Wabco sells in the developed markets. The only dif-ference is in localisation levels,” he said.

Wabco has R&D centres in Hanover in Germany, Chennai and Poland. It is currently set-ting up research centres in China and the US. The Chennai R&D centre presently develops products for the domestic and overseas markets. The specialty is that it develops products at a competitive cost, he said. ECUs and sensors are still imported from Europe and China while valves and wiring harness are indigenised. Currently it makes about 25,000 units of ABS. The company will look at localis-ing other components if the demand exceeds over one lakh unit. Wabco India is currently working with public sector under-taking oil marketing companies to retrofit ABS in trucks carrying petroleum products.

Last year, the company report-ed a turnover of `1,045 crore registering a growth of 17 percent. The revenue contribution from exports is around 14 percent.

The GenesisThe proving ground devel-

opment project began in mid-1995 with forming a multi-disciplined team called Advanced Technology Group (ATG) com-prising mechanical, electronics, software and testing and instru-mentation engineers, as ABS was a combination of different tech-nologies working together as an integrated system.

As the proving ground should meet international standards, SCL then appointed Motor Industries Research Association(MIRA) of UK as test facility consultant for design and development of the layout. It invested around `25 crore then to create the proving ground. The actual construc-tion was carried out by Larsen & Toubro in less than a year and the track was ready for tests by September 1999.

The proving ground had dif-ferent track surfaces as per the international standards, ranging from high friction asphalt surface to basalt, ceramic, split friction (to make one set of wheels on

the high friction surface and the other on the low friction surface), transition friction and others. A sprinkler system enables proper wetting of tracks for low friction tests. The straight-line track facil-ity provides the length to achieve speeds of 80 to 90 kmph on Indian commercial vehicles. The proving ground has a test track of 1.3 km long with 850 metres for speed-ing up approach length followed by a multi-friction braking area of 225 metres with water sprinkling arrangements, run off length of 200 m and finally an arres-tor pit. Sundaram Clayton had commenced its first sale of ABS in February 2002 with Kolhapur-based Maharaja Travels and the next two units were sold to Trichy-based Sri Renganathan Travels.

Under Wabco India, it present-ly retrofits about 500 units of ABS per month and so far the company has retrofitted over 20,000 units trucks and buses. Towards this, it has developed about 150 retrofit-ting centres in the country. It will cost `50,000 for the customers to retrofit ABS in a bus or truck.

Proving ground helps Wabco India with faster product development, validation T Murrali

Chennai

CV Brake Testing On The Proving Ground In Progress P

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Auto Monitor

M A C H I N I N G109 JULY 2012

KOMMA keen on India for trade collaboration

Korean machine tool manufactures are looking at India as a potential market for its

growth. This is part of its agenda to scale up in global ranking from its current fifth position.

Speaking to Auto Monitor, the Director of Korean Machine Tool Manufacturers’ Association (KOMMA), In Ho Shin, said the machine tool manufacturers in Korea are looking at the automo-tive industry in a big way. Besides, they are also looking at steel, ship building, electrical and elec-tronics segments. Towards this, KOMMA is exploring opportuni-ties beginning from Chennai as it is the hub for automobiles in India. The presence of the Korean auto major Hyundai in Chennai is giving enough strength in terms of access to market and understanding by the custom-ers, he said. The apex body is also capitalising on another Korean company— Posco’s plans for India. Besides trade, KOMMA is also seeking a technical collabo-ration, he said.

When asked about the spe-cialty of the machine tools from Korea, Shin said in addition to quality and delivery, the machine tools are high speed and high precision eventually offering cost-effective solutions. With these attributes, “We see the Indian domestic market as very promising,” he added.

The current tend in the machine tool manufacturing in Korea is convergence and inte-gration. When asked if the apex body is working on restricting imports, while encouraging exports, he said, “Limiting, prohibit ing and reducing imports are not good for Korea machine tool manufacturers as well as end user companies. We encourage imports from many countries to learn and take the experience. We strongly sug-gest for Indian companies to go outside India and compete with other companies even though if they feel that they are defeated or they are not cost effective; but they can learn about prod-ucts over a period of time and show their competitiveness, which will be good for Indian companies.”

Korean Machine Tool Market Trends

Machine tool orders received by Korean suppliers in April 2012 stood at KRW 330.5 billion ($290 million), a decrease of 10.3 per-cent, compared to the previous months and a decrease of 29.4 percent compared to the same month in the previous year. The machine tool market saw a decrease in orders compared to the previous month after three months and compared to the same month after seven months. However, it stood over KRW 300 billion ($264 million) for seven consecutive months. Receipt of domestic orders were KRW 172.3

billion ($152 million), down by 41.9 percent compared with the same month in the previous year. Export orders were KRW 158.2 bil-lion ($139 million), decreased by eight percent compared with the same month in the previous year.

The machine tool production till April during this calendar is KRW1,143.5 billion ($126 million), rising by 1.2 percent compared

with the same period of the pre-vious year. Machine tool shipping during this period also increased by 8.5 percent to KRW 1,264.6 bil-lion ($10.8 billion). Machine tool production saw an increase of 12.2 percent when compared to the same month in the previous year, but shipments saw a decrease of 8.9 percent against the same peri-od of the previous year.

KOMMA Exports & ImportsWith exports, exceeding $200 billion for

three months and imports increasing com-pared with the same month in the previous year after two months respectively, the trade balance from January until April 2012 recorded a $284 million surplus.

Machine tool exports from January to April 2012 amounted to US$837 million, an increase of 25.3 percent compared to the same period of the previous year amidst depression in Europe but increased in Asia and North America and Central and South America.

Symbiotic RelationshipMachine tool imports during the same peri-

od amounted to $552 million, an increase of 2.9 percent over the same period of the previous year and imports from Asian, North America decreased but Europe increased.

Established in 1979, KOMMA consists of 160 member companies, which cover 80 percent of total machine tool production. The apex body creates new demand for members and estab-lishes relationship with overseas organisation to exchange information. It also establishes var-ious strategies such as ‘Global Vision 2020’ for machine tool industry.

T Murrali Chennai

KOMMA is exploring opportunities beginning from Chennai, as it is the hub for automobiles in India. The

presence of the Korean auto major, Hyundai in Chennai

is giving enough strength in terms of access to market and

understanding by the customers and it is also capitalising on

Korean company, Posco’s plans for India. Besides trade, KOMMA

is also seeking a technical collaboration

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Auto Monitor

C O R P O R A T E 119 JULY 2012

The longing to cut a share from India’s growing pie, which began with Logan, ended abruptly

with a split from Indian partner, Mahindra & Mahindra. Despite a short and unceremonious stint, Renault had tasted the sump-tuous recipe of the developing automobile industry. Hence, the new tryst began.

The French carmaker made its solo entry (in manufacturing alli-ance with Nissan) in May, 2011 with the launch of the sedan—Fluence, and the annoucement to launch another four products by the end of 2012. It continued with the commitment and made four launches thus far. The cur-rent product portfolio includes a premium SUV Koleos, the hatch-back—Pulse—and the much awaited SUV—Duster. However, the first three launches did not register a strong enough French aroma to tickle India’s rapidly sharpening senses.

However, with the launch of Duster, it has reaffirmed its seriousness towards India. The

vehicle ‘may be called a true seg-ment breaker’ in terms of pricing and features, according to auto-mobile experts and journalists.

The highlights for the Duster SUV range are the price points. Presently, the SUV segment is highly price sensitive—the soft roader, Duster’s cost ranges from `7.19 lakh to ̀ 11.29 lakh with eight variants. The new SUV from the French manufacturer has many attributes to spike the mellowing Indian automobile market.

The vehicle with a monocoque body, gives a smashing competi-tion to Mahindra Scorpio, Force One and already sluggish Tata Safari. Duster, which sold over three lakh units last year in five countries, has been customised for Indian conditions with major changes in the interiors. The stagnating demand of Tata Safari and Scorpio’s old style will help the Duster score high in the buy-er’s mind. With the SUV having a ground clearance of 205 mm, which enables it to be driven in the rural and Tier II cities also.

“We will be launching Duster at 55 dealerships at a time. We want to penetrate all kinds of markets, including Tier II cities”,

MD, Renault India, Marc Nassif said. On asking if 4x4 will also be launched, Nassif said, “that is the next step; we may launch that but only if there is a demand.”

Renault Duster will be avail-able in both petrol and diesel engine options with the choice of two-diesel engines and a pet-rol powered engine. For the more powerful diesel variant, it will use the 1.5 K9K THP, dCi (direct Common rail injection) diesel engine, delivering a 110 PS@3,900 RPM of maximum power and peak torque of 248 nm@2,250 RPM. The engine is mated to a six speed manual transmission with a fuel efficiency of 19.01 kmpl (ARAI figure).

The Duster RxE, RxL Diesel variant with its 1.5 dCi K9K HP engine will produce 85 PS@3,750 RPM of maximum power and 200 nm@1,900 RPM of peak torque with good fuel efficiency of 20.45 kmpl, which will provide one of the best options for economical city driving with enough power to cruise comfortably on the highway as well. The petrol vari-ant uses the 1.6 K4M engine with a displacement of 1.6-litre. It pro-duces a maximum power of 104

PS@5,850 RPM and 145 nm@3,750 RPM peak torque and is mated to a five-speed manual transmission, and a fuel efficiency of 13.24 kmpl.

The base model with 1.6-litre petrol engine is price at ̀ 7.19 lakh ex-showroom while ̀ 7.99 lakh for the 85 PS diesel and ̀ 9.99 lakh for the 110 PS diesel engines. A short turning radius of 5.2 m and fea-tures like independent control rear AC, makes Renault Duster a product that is difficult to resist.

The car maker, which sold around 1,500 vehicles last year, hopes to gain a 20 times increase

in sales this year. In the first two months of this fiscal, it has already sold 1,000 vehicles a month. It will launch the fifth and final product during Diwali and also hopes to complete the network of 100 deal-ers by the end of the year.

Renault will not only be sell-ing the Duster in India, but also export to foreign markets, starting with the UK. Speaking during the launch, VP (Sales & Marketing), Renault India, Len Curran said “It is always nice to produce in large numbers as this gives us economies of scale.”

French Duster to wipe out existing SUV benchmarks Nabeel A Khan

New Delhi

Marc Nassif, MD, Renault India With The Duster At The Launch

JCB India Ltd recently launched a new JCB 3DX backhoe loader claiming to have 20 per-cent higher fuel efficiency in comparison to the previous model, thus helping provide an

opportunity to save costs or increase profits for the owner by upto `two lakh in a year.

The new backhoe loader is powered by the JCB ecoMAX engine, which is a purpose built in-house 76 HP engine. According to the company, the engine provides better fuel efficiency with 16 valve effort. It has a twin ram steering for easy steer ability.

Rural Penetration“In a continually growing sector like

Infrastructure, it is imperative for any company to keep itself abreast with the requirements of its customers and timely deliver on that so that the growth trajectory is always maintained,” said Managing Director & CEO, JCB India Ltd, Vipin Sondhi.

With the launch of the new 3DX backhoe load-er, JCB plans to strengthen its share of the backhoe loader market in India and extend its reach even further to the developing rural markets. JCB has made significant investments in upgrad-ing its manufacturing facilities and research and development.

The new machine has also been provided with new brake linkage to ease the braking effort by the operator, and which ultimately leads to effec-tive braking and reduced fatigue while braking. The machine has been strengthened and a more reliable rear axle gives trouble-free life. The machine has robust king pin design and has a new JCB transmission for better dozing. It has been ergonomically designed with 20 percent more cabin space keeping in mind the require-ment of the operator. The new bonnet with better service access enables the operator to easily carry out daily maintenance checks.

With over 430 outlets across India with trained service engineers, the company provides the best aftersales support to its the machines. The machine offers best return on investment of the customers and has the best resale value.

“With one out of every two machines sold in the construction and earthmoving sector being a JCB, the company aims to create new markets by foraying into new territories as well as giving the best possible rate of return for our customers. This machine will perhaps do just that,” said Sondhi. The company has a network of 57 dealers and over 430 outlets throughout the country.

JCB launches 3DX Backhoe with new engine Our Bureau

New Delhi

Auto Monitor

S T U D Y129 JULY 2012

The PV industry after wit-nessing a high growth scenario of around 25 percent and 27 percent

respectively during two con-secutive years FY10 and FY11 faced a road block in FY12. Macro-economic uncertainties combined with constant rise in petrol prices and firm inter-est rates have pulled domestic growth levels in PV industry.

The industry managed to post a growth of mere 4.7 percent, abet by healthy growth witnessed dur-ing the last quarter. This growth level was the lowest, domestic PV industry has witnessed dur-ing last one decade. Negative sentiments arising due to eco-nomic uncertainties, spiralling fuel prices and interest cost com-bined with high inflation levels prompted many customers to defer their purchase.

De-regularisation of petrol prices from the second quarter of FY11, has given autonomy to oil companies for setting petrol pric-es in tandem with global crude oil prices. Also, spiralling petrol price post de-regularisation affected the demand for petrol vehicles significantly. During April 2010-June 2012, there have been 10 upward revisions in petrol prices, resulting in 46 percent rise in pet-rol prices during this period that consequently has inflated the operating cost of petrol vehicles. Rise in the operating cost of pet-rol vehicles, led to sharp rise in the demand for vehicles running on alternative fuels like diesel, CNG and LPG. Diesel vehicles in par-ticular have witness strong spurt in demand as compared to other two gaseous fuels owing to stabil-ity in prices, easy availability and better mileage.

Price Stability Has Made Diesel Most Preferred Fuel

Due to easy availability and stability in price, diesel has become the most preferred fuel option for the passenger car buy-ers off-late. During the period (ie June 2010-June 2012) when the price of petrol rose by around 46 percent and the CNG and LPG prices escalated by around 51 per-cent and 45 percent respectively, the diesel price on the other hand rose by just 13 percent.

The average fuel cost per km for LPG vehicle increased from `2.5 in June 2010 to around ̀ 3.8 in

June 2012, while that of CNG vehi-cle has increased from ̀ 1.7 per km to `2.2 during the same period as observed by CARE Research. Owing to minimal increase in diesel prices, the fuel cost per km for diesel vehicle has merely increased from `2.0 in June 2010 to around `2.2 in June 2012. As diesel is the primary fuel used in the transportation sector and an upward revision in diesel pric-es pushes inflation northwards, hence complete de-regularisa-tion in diesel prices is unlikely in short-term. During last two-three years the demand for diesel cars has risen like never before and buyers are ready to shell out the additional 15-20 percent cost for buying diesel models in order to garner the benefits of lower fuel price and higher mileage.

CNG Remains The Cheapest Option

The key cost component involved for owning a vehicle are fuel costs, initial capital costs of vehicle, maintenance costs, insur-ance costs, and financing costs etc, which significantly influence the making purchase decision of a buyer. In order to estimate the total cost of operation of a vehi-cle, CARE Research considered initial cost of purchase and fuel cost as the proportion of other costs is miniscule. CARE Research observed that lower initial cost of vehicle combined with lesser fuel cost and higher mileage, the CNG vehicle needs minimum time to

recover incremental cost over pet-rol vehicle followed by LPG and then diesel. For example, if vehicle is driven for around 10,000 km per annum, it would take around 12 months to recover the addition-al cost paid over petrol vehicle. Further for LPG vehicle it would take around 22 months to recov-er the additional cost, while for diesel vehicle the period required for recovering additional cost is around three years.

Furthermore, CARE Research observed, inspite of diesel vehi-cles offering the lowest fuel cost per km, the incremental capital cost difference between diesel vehicle and CNG/LPG vehicle is considerably high. For example the initial capital cost difference between diesel and CNG vehicles is around `75,000-`85,000, while there is difference of around `90,000-`100,000 between die-sel and LPG vehicles. This makes diesel vehicles lesser cost effective than CNG and LPG.

Gaseous Fuel Less Preferred Over Diesel

CARE Research observed that, although gaseous fuels like CNG and LPG are more economi-cal than diesel and petrol, their availability as well as security concerns arising due to mishaps caused by the bursting of gas cyl-inders have kept customers at bay. It was found that acceptability of CNG is much higher than LPG as a safer fuel. However because of limited presence of City Gas

Distribution (CGD) network which is currently in 41 cities in India the supply of CNG is restrict-ed only to those areas. In case of LPG, constant mishaps owing to high inflammable property of LPG and higher maintenance cost has led customers avoiding pur-chase of LPG powered vehicles. These constraints in gaseous fuel vehicles, has further aided in the growth of diesel powered vehicles.

Diesel Vehicles To Surpass Market Share Of Petrol Vehicles In The Short Term

Going forward, CARE Research expects the share of diesel-driven vehicles to increase in the overall pie of the Indian PV industry. With more than 90 percent of new sales in the utility vehicle segment being diesel variants, the dieselisation trend is now catching up strongly in the passenger car segment also. The diesel car sales were estimat-ed to be around 43 percent of the total car sales in FY12 and for some of the models which have diesel as well as petrol option, sale from die-sel variants was around 70 percent of the total sales. The growth trend in the diesel vehicles sales has been even stronger during current fiscal owing to rising uncertainties about petrol prices.

Uncertainties Over Government’s Plan To Impose Additional Tax On Diesel Vehicles

The rising difference between petrol and diesel retail prices is encouraging more and more buy-ers to opt for diesel vehicles. The uncertainties over government’s intension to impose additional tax on diesel vehicles may dent the demand to some extent as the recovery period of the incremen-tal cost for diesel vehicle would extend. CARE Research believes, these concerns would fade away gradually, as cost benefits entailed over a life of a vehicle inspite of the imposition of additional tax would continue to drive consum-ers in favour of diesel vehicle. As per our estimates diesel vehicles would account for more than 1/2th of the new sales in the PV segment in FY13, from the cur-rent level of around 43 percent.

(Courtesy: CARE Research)

Diesel & petrol preferred options over gaseous options

CARE Research observed that,

although gaseous fuels like CNG and LPG

are more economical than diesel and petrol, their availability as well as security concerns

arising due to mishaps caused by the bursting of gas cylinders have

kept customers at bay

Revati KastureHead-Industry Research

Vishal SrivastavManager

Change in fuel prices since April 2010

Cost comparison across different fuels

Auto Monitor

A U T O N O M I C S149 JULY 2012

The launch of the Tata Ace in 2005 changed the dynamics of the LCV market, creating a new

segment: sub-one tonne vehicles, which along with pick-ups were termed small commercial vehicles (SCVs). SCV sales surged between 2004-05 and 2011-12, driving a 22 percent CAGR in LCV sales during the period. Hub and spoke pro-liferation, growth in organised retail and substitution of large three-wheelers by SCVs, aided this growth. CRISIL Research believes that the LCV growth story will continue in the long term. A study of LCV markets across India and a comparison with China indi-cates that domestic LCV sales would continue growing at a 14-16 percent CAGR during 2011-12 to 2016-17. This growth potential will attract more players into the Indian LCV market, thereby inten-sifying competition.

LCV Growth Story To Remain Intact

CRISIL Research expects LCV sales to continue to grow in double digits during 2011-12 to 2016-17, driven by a strong rise in small commercial vehicle (SCV) sales. SCVs have long driven the growth in LCV sales, since the launch of the Tata Ace in 2005. The Ace exploited the vacant space between three-wheelers and upper-end LCVs and created a new segment known as mini-trucks or sub-one tonne vehicles. These vehicles that have a payload of less than one tonne, together with pick-ups, form the SCV seg-ment. SCVs are now estimated to form more than three-fourths of the total LCV population in the country as compared to less than half in 2004-05.

The significance of SCVs is also reflected in the fact that until their coming, LCV sales volume growth had been almost sedate—trending at about seven percent between 1990-91 and 2004-05—due to the absence of suitable vehicles for last-mile distribu-tion. By contrast, LCV sales more than quadrupled at a 22 percent CAGR over 2004-05 to 2011-12, driven by a 31 percent growth in SCV sales.

The following factors helped SCVs grow in the past five years: i) proliferation of the hub and spoke model, ii) rising private consumption expenditure and

iii) substitution of large three-wheelers. SCVs also created a new customer class: first-time users and drivers-turned entre-preneurs, who turned vehicle owners as opposed to hiring vehi-cles in the past.

Substitution of large three-wheelers by SCVs is estimated to have contributed to a fourth of total LCV sales, till date. SCVs have almost replaced large three-wheelers, as a higher loading capacity, ability to travel longer routes and better cost economics made SCVs more preferable.

SCVs have also substituted upper-end LCVs to an extent. In a recent study—LCVs: Growth stor y cont i nues — CR ISIL Research has found that SCVs offer the higher returns to trans-porters than upper-end LCVs. This explains why the share of upper-end LCVs in total LCV pop-ulation has declined from well over a half in 2005-06 to just over a fifth in 2011-12.

In the next five years too, LCV sales are expected to con-tinue to grow in double digits. Besides the factors discussed above, growth will also be aided by replacement demand and sub-stitution of small-three-wheelers to an extent. We expect replace-ment demand for sub-one tonne vehicles, which were sold since 2005-06, to set in over this period. Similarly, though the substitution effect from large three-wheelers will fade, aggressive marketing of

0.5-tonne payload SCVs will sub-stitute small-three wheelers to an extent, aiding LCV sales.

CRISIL Research thus expects LCV sales to post a 14-16 percent CAGR during 2011-12 to 2016-17, led by a 15-17 percent CAGR in SCV sales. The growth poten-tial of the Indian LCV market remains huge as compared to global peers such as China. Our study reveals that as of 2011-12, India’s LCV: MHCV ratio was half that of China’s 1.8 times. This indicates significant scope for volume growth in the Indian LCV market over the next five-seven years. India’s LCV: MHCV ratio is expected to improve to 1.25 times by 2016-17. A comparison of LCV penetration across Indian states in our study also indicates a huge volume growth potential.

States With Lower LCV Penetration To Show Faster Sales Growth

The share of different states in total LCV sales is broadly in line with their contribution to national GDP. For instance, Maharashtra, UP, Tamil Nadu, Andhra Pradesh and Gujarat contributed to 47 percent of the country’s GDP in 2010-11 and accounted for 47-48 percent of total LCV sales volumes during the year. In the next 5-7 years, therefore, CRISIL Research expects sales in states with a rel-atively lower LCV penetration to accelerate, helping them garner

a greater share in total LCV sales. This trend is already evident in states like Haryana, Rajasthan, Bihar and Madhya Pradesh where LCV sales growth surged in 2011-12. However, the top five states will continue to lead in volume terms, growing healthily.

(To determine LCV penetra-tion across states, we studied the LCV population in each state rel-ative to 4 factors: size of GDP and private consumption expend-iture, urban population and MHCV population.)

Volume Growth Potential Makes Indian LCV Market Attractive, Even As Competition Intensifies

Within the Indian LCV market, competition in the SCV segment may heat up further as more players enter the fray and mod-els are launched across tonnage points. For instance, Mahindra & Mahindra’s (M&M’s) Maxximo, launched in 2010-11, is estimated to have wrested an over 10 per-cent market share in total LCV sales volumes for 2011-12. The Maxximo addressed the need for higher-powered SCVs and had a greater payload than Ace (till then the only major SCV model). Similarly, Ashok-Leyland Nissan’s recent offering Dost, which com-bines features of both mini-trucks and pick-ups, has already gained over 6 percent share in total LCV sales volumes in the first two months of the current fiscal.

More players are expected to enter the Indian LCV market in the coming years, intensifying competition further. For exam-ple, Chinese truckmakers Beiqi Foton and GM-SAIC are expect-ed to launch models from their famous Forland and Wuling ranges. As a result, players will have to constantly innovate and offer value-for-money to stay competitive. Nevertheless, the volume growth potential of the Indian LCV market will ensure that most players will stay in for the long haul.

(Please note that the views

expressed here are those of CRISIL Research and not of CRISIL’s Ratings division. CRISIL Research operates independently of and does not have access to informa-tion obtained by CRISIL’s Ratings Division.)

Global, regional comparisons reveal untapped potential in LCVs

CRISIL Research expects LCV sales to continue to grow in double digits during 2011-12 to 2016-17,

driven by a strong rise in small commercial

vehicle sales

Geoffrey DcunhaManager, CRISIL Research

Hetal Gandhi Associate Director, CRISIL Research

Ajay SrinivasanDirector, CRISIL Research

Auto Monitor

G L O B A L W A T C H189 JULY 2012

Europcar appoints new Operations Director

Europcar, a car hire service compa-ny in Europe, continues to invest in the quality of its operations with the appointment of Robert Shaw as

Operations Director. With over 25 years’ expe-rience in the rental industry, Robert will drive forward plans to develop Europcar’s UK net-work. This key appointment is part of Europcar UK’s overall business strategy as it continues to maintain its competitive edge.

Shaw joined Europcar as a Regional Manager, in 2001, becoming Regional Director in 2007. Prior to his successful career at Europcar, he held a number of key management roles at other major rental providers and his experience in strategic planning and management, as well as both opera-tions and sales will be invaluable in his new role at Europcar. He reports to Ken McCall.

“Europcar continually focuses on improving the level of customer service and this will be a key area for the Operations team,” said Robert Shaw. “I aim to develop the Europcar UK network by making our products and services more accessi-ble and convenient to customers, with plans to open more locations at transport terminuses in major UK cities.

“This expansion will be supported by high levels of performance through our delivery and collection service, as well as major new launch-es designed to enhance our customer offering. Customer service will remain at the heart of everything we do; ensuring Europcar meets cus-tomer demand in a competitive market. I am also looking forward to harnessing the commitment and expertise of the operations team to drive us towards new levels of success.”

Managing Director, Europcar Group UK, Ken McCall said, “Robert has a deep understand-ing of Europcar and a wealth of expertise in the rental industry, making him a natural choice as Operations Director. I am confident that Robert will lead and inspire the operations team to create the UK’s leading vehicle hire network. He will play a key role in implementing commercial initiatives designed to deliver the best level of service to our customers and support Europcar’s overall busi-ness strategy.”

Globa l automot ive supplier, Visteon Corporation recent-ly launched an

electronic instrument cluster on Honda’s new scooter model, the VarioTechno 125 PGM-FI, in Indonesia.

The entry-level instrument cluster is the first product man-ufactured at PT Astra Visteon Indonesia, a joint venture of Visteon and PT Astra Otoparts, Tbk, based in Citeureup, Bogor. The instrument cluster was designed to meet the rigor-ous demands of the Indonesian landscape, while providing man-ufacturers a content-rich product that can be customised for differ-ent models.

“We are proud to be a part of Honda’s two-wheeler expansion in the Indonesian market,” said President Director of PT Astra Visteon Indonesia, Hiroaki Kishita. “With the successful launch of the instrument clus-ter on the Honda Vario Techno 125 PGM-FI, PT Astra Visteon

Indonesia is poised to bring quality products to the world’s third largest motorcycle mar-ket, while also meeting growing demand in the passenger vehi-cle market.”

To address the challenging requirements of two-wheeler mobility in Indonesia, Visteon developed an instrument clus-ter with robust mechanical and electrical design features to withstand various demands. By incorporating a single, easy-to-read analogue speedometer, drivers receive important infor-mation quickly from the 2.5-inch digital LCD display, which is considered unique in this eco-nomic two-wheeler class. The use of high-impact lighting tech-nology enables the motorist to read instrument indicators eas-ily in all light conditions. These features are further enhanced by the 3D chaplets and sil-ver painted mask that give the cluster an overall dynamic and sporty appearance.

As an integral part of a series

of two-wheeler instrument clus-ters, Visteon engineering teams in Japan and India customised the product to meet Honda’s requirements for state-of-the-art functionality and styling. Leveraging the f lexibility of a common platform, experi-enced engineers and localised components, Visteon achieved cost efficiencies that result-

ed in a quality product at a competitive price.

“With the launch of the instru-ment cluster on the Honda new scooter, Visteon has expanded its manufacturing footprint for electronic products in one of the world’s fastest-growing mar-kets,” said Visteon Product Group President, Steve Meszaros.

Visteon is a leading global

automotive supplier that designs, engineers and manufactures innovative climate, electronic, interior and lighting products for vehicle manufacturers. With corporate offices in Van Buren Township, Mich. (US); Shanghai, China; and Chelmsford, UK; the company has facilities in 27 countries and employs approxi-mately 25,000 people.

Visteon launches instrument cluster on Honda’s new scooter in Indonesia

Europcar continually focuses on improving the level

of customer service and this will be a key area for

the Operations team— Robert Shaw

With the launch of the instrument

cluster on the Honda new scooter, Visteon

has expanded its manufacturing footprint for electronic products in one of the world’s

fastest-growing markets—

Steve Meszaros, President, Visteon

Product Group

Instrument Cluster Range

Auto Monitor

G L O B A L W A T C H209 JULY 2012

Nissan Leaf to reverse into the record books

At the Goodwood Festival of Speed (29 June -1 July), Nissan Leaf will attempt to complete the 1.16-mile Goodwood hillclimb course as fast as possible, but

in reverse, setting a new Guinness World Record for the fastest time over a distance of one mile in reverse.

With direct drive from the electric motor to its wheels, the Nissan Leaf going backwards should be able to hit the same top speed it manages going forwards. With its batteries located under the floor of the car, it has a low centre of gravi-ty making the car very stable at speed with little body roll under cornering. And with fewer moving parts than a conventional car, there’s less likeli-hood of mechanical issues thwarting the attempt.

The attempt is part of Nissan’s ambitious social media-driven campaign, The Big Turn On, which is spreading the EV message across Europe. The campaign aims to prove that as well as being environmentally friendly, the Nissan Leaf is safe, economical to run, practical, and fun to drive.

Professional stunt driver, Terry Grant will attempt the Leaf Reverse Record. Terry thrilled the crowds at the 2011 Festival of Speed by driv-ing a Nissan Juke up the hillclimb course on two wheels.

“The Leaf Reverse Record isn’t going to be easy and will be very challenging,” admitted Terry. “I’d prefer to do it on a nice straight and level strip of tarmac rather than on Lord March’s drive. The hill not only climbs, but is also full of twists, turns and obstacles.

“It’s a hugely technical test of speed and con-centration. But despite the risks, the strength and integrity of Nissan Leaf’s design gives me con-fidence. Whatever happens, I know I’m going to finish the weekend with a serious crick in my neck!”

One of the other Nissan stars of the FoS week-end will be the dramatic race-prepared Nissan Leaf NISMO RC. It will be racing against the clock, to set a hill record for electric vehicles. It will be driven by 2011 FIA GT1 Championship winning driver, Michael Krumm, who wowed the huge crowd at this year’s Le Mans 24 Hours from behind the wheel of the startling Nissan DeltaWing endurance racing car.

New price data from BCA shows that while volume diesel cars continue to enjoy a

substantial average price premi-um over petrol in the wholesale market, their retained value is actually lower over a forty month cycle.

BCA suggests this should pro-vide food for thought for the wider industry at a time when new die-sel registrations by fleets and businesses are at record levels. Typically the average used fleet and lease diesel model sells for up to £1,500 more than the average petrol car, broadly equivalent to a 25 percent premium. However, in terms of retained value com-pared to MRP (Manufacturer’s Retail Price), fleet diesel cars average around 36 percent, com-pared to nearly 39 percent for petrol cars.

Some of this is undoubtedly down to the sharp divergence in the average mileage covered dur-ing that time. For petrol cars it is around 30,000 miles, for diesel

cars the average is nearly dou-ble that figure. But with average diesel MRP being around £4,500 higher than the equivalent petrol MRP, this tips the scales in pet-rol’s favour.

BC A Com mu n icat ions Director, Tony Gannon com-mented, “There can be little argument that the average price of a diesel car always outper-forms that of a similar average petrol model. Research from BCA’s Pulse report shows there is a clear and significant difference in average value at remarketing time—rarely less than £1,200 and peaking at £1,553 in October last year, which was equivalent to a 31.9 percent variance.”

“However, when looking at the retained value over the typ-ical 40-month working life of a volume fleet & lease car, the petrol car—perhaps surprising-ly—is the stronger performer by some three percentage points. Of course, the mileage factor is important, but then diesels are purchased with that higher

mileage factored into the overall running costs.”

With new diesel registrations running at over 50 percent of the total market for the first time on record and rising, there are nearly a million new diesel cars enter-ing the market every year. The majority of these—644,000—are purchased by the business, fleet and contract hire sector, which saw a 12.2 percent uplift in diesel volume last year. Private sales of new diesels dropped by 6.3 per-cent to 337,000 during 2011.

Gannon added, “Clearly, fleet operators have a much great-er appetite for diesels than the private sector. While diesels accounted for nearly two-thirds (63.2 percent) of new cars sold to the 25-plus fleet sector in 2011, they represented just 36.6percent of new diesels sold to private new car buyers. Many of the diesels purchased by fleets are high spec-ification, high value executive models, but is that what motor-ists want - or can afford - in the current economic conditions?”

In contrast used diesel vol-umes slipped from 36percent to 34percent of the total in last year’s BCA Used Car Market Report, representing sales of 2.2 million. Looking ahead, BCA’s research conducted for the 2011 BCA Used Car Market Report states that around 26percent of UK motorists intend buying a used or nearly-new diesel next time they change, compared to 74percent petrol. BCA is asking if this could have some longer term ramifications for the used market as a whole?

He concluded “The motivation for motorists when buying diesel has always been very clear—fuel consumption is perceived to be the major benefit, along with reli-ability—and this has been worth paying a premium for. But when you add in the on-going concerns about the cost of motoring, the trying economic conditions and an apparent shift away from die-sels by private new car buyers, it is possible that the new-gen of fru-gal and economic petrol engines will start to challenge diesel’s position in the years ahead.”

Diesel values retain price premium, but petrol holds its value better: BCA

Nissan Leaf

Auto Monitor

G L O B A L W A T C H229 JULY 2012

Background

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Federal-Mogul introduces eco-friction range of brake pad materials to meet new copper legislation

Federal-Mogul has succeeded in formulating low- and

zero-copper Low-Steel and NAO brake materials for

our Eco-Friction range that provide outstanding braking performance and confidence

using tribological fingerprinting

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Federal-Mogul Eco-Friction Pads

Auto Monitor

G L O B A L W A T C H249 JULY 2012

News about politics, business, sci-ence and technology, health, sport and entertainment–with the new Mercedes-Benz News app for Comand

Online, Mercedes-Benz drivers will in future be able to pick up all the latest information in their car.

As with all applications designed for the Comand Online multimedia system, the news app is safe and easy to use. Whether stationary or on the move, Mercedes-Benz customers have a user-friendly way of finding out about all the lat-est happenings and things they need to know. The news, including photos, can also be shown on the vehicle’s display screen.

The latest news and images from all over the world are provided on an exclusive basis by the German news agency group Dapd. Dapd cooper-ates with news agencies in 22 countries around the world, and supplies its special in-car news package in 28 different languages. Each time the dapd news ticker is updated, the latest informa-tion is available in the car too, in the appropriate language. Mercedes-Benz customers are also able to select country-specific settings, for exam-ple which country they would like to receive the top news feed from. Their Mercedes-Benz thus becomes a mobile newsroom.

The news app is already available as a stand-ard feature on the Mercedes-Benz SL and will then also be available from mid-July for all new Mercedes-Benz models fitted with Comand online. Customers who already own a vehicle with Comand Online can source the apps from the Mercedes-Benz App Shop on http://apps.mer-cedes-benz.com. One need not visit a workshop or dealership, as the news app is uploaded to the vehi-cle via the Cloud (Daimler Vehicle Backend).

Mobile newsroom with MB News app for Comand Online

After Europe, Russia and Latin America, the DS line will be launched in China on 28 June, 2012.

The brand is also extending and modernising its main range with two new models. Citroën is strengthening its product offering, in particular in the C segment, in order to break into high-growth international mar-kets such as the Mediterranean basin, China and Russia. The compact saloon market is the biggest automotive market in the world, with more than 20 million vehicle registrations in

2011, representing almost one third of all worldwide sales of passenger cars.

Citroën is launching the new Citroën C-Elysée and the C4 L, a ‘lounge’ version of the C4 to cover this market, 43 percent of which is made up of three-box models in Russia, and even 79 percent in China. These two saloons have highly specific personalities, form a tight fit in their respective market positioning and respect the codes of their target segments. Harnessing all the expertise of Citroën’s international teams, these French-designed models

embody the excellence of the Brand in terms of style, technol-ogy, development and quality.

The new Citroën C-Elysée was designed to meet the expecta-tions of a demanding clientele, looking for a car that is both attractive and accessible. The innovative design offers a roomy interior that is ideal for families (a rear compartment befitting a saloon in the next higher cat-egory and a 506-litre VDA boot), due to the 2.65 m wheelbase, the longest in its category. It can also be fitted out with a broad range of comfort equipment, from air conditioning with a digital read-out, to the MP3 car radio with its Bluetooth hands-free kit.

In certain markets, the new Citroën C-Elysée will also be available with the latest-gen-eration VTi 72 engine, with technology that combines above-par performance with moderate fuel consumption and durabil-ity. Finally, it also benefits from the Brand’s full range of expert knowledge and know-how, from the chassis and suspension, to quality assurance. The car’s design (specific clearance, pro-tective guards, etc.) was tested

all over the world and under all driving conditions, guarantee-ing reliability to stand any test. Points that are all fundamental for very demanding customers who view their car as a long-term investment. Manufactured in Vigo, Spain, this three-box saloon will initially be launched in Turkey, Spain, Central Europe and Algeria at the end of 2012.

The Citroën C4 L is posi-tioned in the top part of the C segment. Just like the Citroën C4, this visibly prestigious and elegant car offers all of the brand’s emblematic qualities, from a range-topping finish, to the comfortable suspension and standard-setting onboard com-forts. It is the first Citroën to come out of the Shanghai style centre. The elegant and dynamic lines, highlighted by a light signature at the front and the rear, produce the effect of a prestigious profile at first sight.

On board, the driver and pas-sengers enjoy the pleasures of first-class travel, with the quiet and the comfortable temperature of the interior, the lounge-like rear compartment (long wheelbase, wraparound seats, backrests

inclined at 29 degrees, extra-comfortable headrests) and innovative comfort-enhancing technology (hands-free access and start, touch-screen GPS, reversing camera, fully heated windscreen, air ioniser, etc.). The Citroën C4 L is also fitted with latest-generation petrol engines: the THP 155/170 (according to country), developed in partner-ship with the BMW Group, and the VTi 135. Both engines can be mated to a new automatic and sequential six-speed gearbox. To meet the specific needs of each of its markets more closely, the Citroën C4 L will be made in each of the zones where it will be sold: in Wuhan, China by the end of 2012 and Kaluga, Russia in the first half of 2013.

Citroën’s International Activity:

Europe in 2011

Europe, up 10 points in 10 years and three points up on 2010

customers in more than 55 countries outside Europe

Citroën steps up its strategy for international growth

Mobile Newsroom With News App For Comand Online

Auto Monitor

T E C H N O L O G Y269 JULY 2012

Heat can damage the batteries of electric vehicles—even just driving fast on the

freeway in summer tempera-tures can overheat the battery. An innovative new coolant con-ducts heat away from the battery three times more effectively than water, keeping the battery temperature within an accept-able range even in extreme driving situations.

Batteries provide the “fuel” that drives electric cars—in effect, the vehicles’ lifeblood. If batteries are to have a long service life, overheating must be avoided. A battery’s “com-fort zone” lies between 20°C and 35°C. But even a Sunday drive in the midday heat of summer can push a battery’s temperature well beyond that range. The damage caused can be serious: operat-ing a battery at a temperature of 45°C instead of 35°C halves its service life. And batteries are expensive—a new one can cost as much as half the price of the entire vehicle. That is why it is so important to keep them cool.

Thus far, conventional cool-ing systems have not reached

their full potential: either the batteries are not cooled at all—which is the case with ones that are simply exchanged for a fully charged battery at the “service station”—or they are air cooled. But air can absorb only very little heat and is also a poor conduc-tor of it. What’s more, air cooling requires big spaces between the battery’s cells to allow sufficient fresh air to circulate between them. Water-cooling systems are still in their infancy. Though their thermal capacity exceeds that of air-cooling systems and they are better at conducting away heat, their downside is the limited supply of water in the system compared with the essen-tially limitless amount of air that can flow through a battery.

More Space Under The Hood

In the future, another option will be available for keeping bat-teries cool—a coolant by the name of CryoSolplus. It is a dis-persion that mixes water and paraffin along with stabilis-ing tensides and a dash of the anti-freeze agent glycol. The advantage is that CryoSolplus

can absorb three times as much heat as water, and functions better as a buffer in extreme situations such as trips on the freeway at the height of sum-mer. This means that the holding tank for the coolant can be much smaller than those of watercool-ing systems—saving both weight and space under the hood.

In addition, CryoSolplus is good at conducting away heat, moving it very quickly from the battery cells into the coolant. With additional costs of just Euros 50 to 100, the new cooling system is only marginally more expensive than water cooling. The coolant was developed by researchers at the Fraunhofer Institute for Environmental, Safety and Energy Technology UMSICHT in Oberhausen.

As CryoSolplus absorbs heat, the solid paraffin droplets with-in it melt, storing the heat in the process. When the solution cools, the droplets revert to their solid form. Scientists call such sub-stances phase change materials or PCMs. “The main problem we had to overcome during development was to make the dispersion stable,” explained a scientist at UMSICHT,

Dipl.-Ing. Tobias Kappels. The individual solid droplets of par-affin had to be prevented from agglomerating or—as they are lighter than water—collecting on the surface of the dispersion. They need to be evenly distribut-ed throughout the water. Tensides serve to stabilise the dispersion, depositing themselves on the par-affin droplets and forming a type of protective coating.

“To find out which tensides are best suited to this purpose, we examined the dispersion in three different stress situations: How long can it be stored with-

out deteriorating? How well does it withstand mechanical stresses such as being pumped through pipes? And how stable is it when exposed to thermal stresses, for instance when the paraffin parti-cles freeze and then thaw again?” said Kappels. Other properties of the dispersion that the research-ers are optimising include its heat capacity, its ability to transfer heat and its flow capability. The scien-tists’ next task will be to carry out field tests, trying out the coolant in an experimental vehicle.

(Courtesy: Fraunhofer Institute)

Fraunhofer develops new battery cooling solution

The development programme of Jaguar’s forthcoming F-Type sports car stepped-up a gear as the model makes its global public debut at Goodwood’s Festival of

Speed. Driven up the challenging hill by Jaguar’s Head of Vehicle Integrity, Mike Cross, the all-aluminium F-Type—a Supercharged V6 example —ran with its hood down for the first time in pub-lic view.

Said Mike, “The F-Type will deliver a driver-focused sports car experience, and camouflaged prototypes like this one are currently being tested all over the world. The development programme is right on schedule, and coming here today to showcase just a little of the dynamic precision, noise, speed and excitement that the production F-TYPE will exhibit is very satisfying. The reaction of the crowd has been fantastic—I’d like to keep running it up the hill all day!”

Due to special dispensation from the Goodwood organisers, one of the F-Type’s runs saw it shoot up the hill immediately after C-type, D-type and E-type models, giving spectators a unique opportunity to view both Jaguar’s sport-ing bloodline, and its future one, at high speed.

Said Global Brand Director, Jaguar Cars, Adrian Hallmark, “When we announced the F-Type’s development at New York in April of this year, we were delighted with the positive reac-tion from the press and public alike. The F-Type will be a true sports car, so to be able to give the fans here at Goodwood a first-hand flavour of the sight and sound of Jaguar’s exciting future is a great privilege.”

Announced earlier in 2012, the F-Type will be a two-seater sports car powered by both super-charged V6 and supercharged V8 engines and will be launched in convertible form. The full produc-tion F-Type range will be revealed later this year.

JLR steps-up F-Type development at Goodwood’s festival

CryoSolplus Cooling Solution

F-Type Sports Car

Auto Monitor

G L O B A L W A T C H 279 JULY 2012

International auto round-upRenault unveils new Clio

Renault unveiled the latest generation of its Clio subcompact with a fresh design, fuel-efficient engines and a range of what the automaker said are affordable and innovative technologies. The Clio is Renault’s best-selling car in Europe. The new model may be offered only as a five-door car and will go on sale later this year. It will be offered with tech-nologies such as Renault’s R-Link integrated Internet-connected touchscreen tablet, a reversing camera and keyless entry.

The Clio will be the first Renault model to get a new 90 Hp, three-cylinder, 900 cc tur-bocharged gasoline engine that delivers the performance of a normally-aspirated 1.4-litre pow-erplant. Coupled with a stop-start system, it has fuel economy of 4.3 litres per 100 km and CO2 emis-sions of 99 gram per km. The Clio’s engine will be a 90 HP 1.5-liter die-sel with fuel economy of 3.2 l/100 km and CO2 emissions of 83g/km.

The Clio is the first production model styled by Renault design head Laurens van den Acker, who joined Renault from Mazda in 2009. The five-door Clio has rear door handles concealed close to the rear quarter lights to give it the sporty look of a three-door car. Buyers will be able to personal-ize the exterior with various door mirror housings, grille bars, rear panel skirts, lower door protec-tors and wheel finishes, as well as a choice of roof graphics. Inside, there are different options for the dashboard, door panels, steering wheel, gear lever and air vent sur-rounds, and upholstery materials.

Renault has sold 11.5 million Clios since the first generation was launched in 1990. Last year, the Clio was the fourth best-sell-ing subcompact in Europe after the Ford Fiesta, VW Polo and Opel Corsa. The Clio’s 2011 European sales were nearly 305,000, down 13 percent on the year before, atudy by Jato Dynamics.

BorgWarner agrees to sell spark-plug business to Federal Mogul

BorgWarner Inc said it agreed to sell its spark-plug unit to Federal-Mogul Corp. BorgWarner, based in Auburn Hills, acquired the unit as part of a 2005 transaction. The company will incur a pretax loss of $50 mil-lion to $60 million related to the sale, BorgWarner said. Federal-Mogul, based in Southfield, said in March it plans to create a separate and independent after-market unit. The business, which sells auto parts through retailers, comprised 34 percent of compa-ny revenue last year, down from 44 percent in 2009. BorgWarner, which saw sales of $80 million for its spark- plug business in 2011, said it will expand glow plugs, diesel cold start systems, and other gasoline-ignition technolo-gies. Federal-Mogul, in a separate statement, said its annual spark plug capacity will be more than 350 million once the acquisition is completed. Federal-Mogul owns the Champion spark plug brand.

GM-PSA alliance to get closer examination from German cartel office

The German federal car-tel office plans to examine more closely the alliance between GM, its German unit Opel, and France’s PSA/Peugeot-Citroen to look at its effect on car-parts suppliers. The Phase II review could take as long as three months to com-plete, a spokesman for the cartel office said. He added that a second examination was necessary since the initial one-month review was simply not long enough to study the likely effects the link-up would have on a broad number of parts suppliers.

GM and PSA said that they hoped the alliance would lead to at least $two billion (Euros 1.6 billion) in annual savings shared evenly between the two within about five years from joint pur-

chasing, logistics and the joint development and production of vehicles and parts. GM signed a deal to transfer the bulk of its European logistics operations to PSA unit Gefco starting next year in the first stage of the partnership.

Fiat to shut five truck plants in Europe by end of year

Fiat Industrial’s truck unit Iveco SpA plans to shut down five plants in Europe by the end of 2012 because of the economic crisis in the region, Chief Executive Officer Alfredo Altavilla told reporters in Turin at the presentation of the new Stralis truck. About 1,075 Iveco workers will be affected by the plan in Germany, France and Austria, said Altavilla, who added that the company is negotiat-ing with unions on the plan. The company expects sales of heavy trucks to fall 10 percent in Western Europe this year, Altavilla said. He also said Fiat Industrial is not in talks with Navistar International for a combination.

Daimler’s second quarter truck profits to take a hit

Daimler AG expects weak demand in Brazil and invest-ments in new products to weigh on second-quarter profit from its truck unit, said Head of Daimler Trucks, Andreas Renschler. “Both of these factors will also affect our results,” Renschler said at a pres-entation. “We anticipate a more positive picture in the second half of the year, when the Brazilian market, for example, is expected to experience another upswing.” Demand in Brazil stalled after the country tightened emissions rules to the Euro V standard from Euro III, prompting Daimler to cut local production. The compa-ny presented its new heavy-duty truck Actros at the end of last year, and one-third of that model’s sales are now of the new generation.

Mazda to up Hiroshima plant’s engine output

Mazda will double produc-tion capacity at its engine plant in Hiroshima. Production vol-ume will be increased from 400,000 units to 800,000 units per year in October. The plant produces SKYACTIV-D diesels and SKYACTIV-G gas engines. The automaker also said it will increase production capacity for its new crossover SUV, Mazda CX-5, from 200,000 units to 240,000 units per year at its Ujina plants in Hiroshima.

BMW, Toyota sign deal to build sports car

BMW AG and Toyota agreed to jointly develop a sports car, hydrogen fuel cells and elec-tric car technology. They’ll also work together to make cars light-er under a deal signed recently. The companies had been inching closer together since December, when they signed an agreement for BMW to provide Toyota with small diesel engines in Europe. The new deal lets the companies share in the other’s strengths. Toyota and BMW have signed an MOU at BMW’s Munich headquar-ters to jointly develop a hydrogen fuel cell system, work together on the undercarriage and com-ponents for a future sports car, collaborate on electric propulsion systems and do research togeth-er on technology that will make cars lighter.

GM says it sold 1,760 plug-in hybrid Chevrolet Volt vehicles in June, double its sales of June 2011. In the first half of 2012, GM sold 8,817 Volts, more than triple the 2,745 it sold in the same period last year. It already has topped Volt sales for all of 2011, which were about 7,600. Volt sales have been boosted by California’s decision to grant solo Volt drivers access to car-pool lanes. June sales were up over the 1,680 Volts sold in May. GM had 5,300 Volts in stock at the end of June, an 82-day supply. GM has been sharply outselling its Japanese rival, the all-electric Nissan Leaf, by more than 3 to 1. It did so again in June. The Detroit-based automaker has abandoned its

2012 US sales forecast of 45,000, saying it would instead match supply to meet demand.

GM has been forced to idle the Detroit-Hamtramck Assembly Plant for two stretch-es this year because of low demand. Meanwhile, Leaf sales fell 69 percent in June, to 535. For the first six months, Nissan has sold 3,418. That’s down 19 percent over the same period in 2011. The Japanese automak-er has repeatedly insisted it will sell 20,000 Leafs in the US in 2012. It will have to aver-age 2,763 a month for the rest of year—or as many as it sold in the first five months com-bined—to meet that forecast. GM’s Volt has now outsold the Leaf by 5,400 this year.

GM sells 1,760 Volts in June

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Getting Personalwith Chris You, MD, Cobra Carbide

Chris You is the Managing Director at Cobra Carbide based in Bangalore. Proir to his current assignment, he was the Managing Director at YG Cutting Tools and has led the $60 mil-lion investment project from May 2011. He has also led the $60 mil-lion investment project from May 2011. Earlier, he was the Managing Director at HSS Drills manufacturer and YG1 Industries Pvt Ltd, Mumbai (India) as Chief Executive Officer. He is also a Director of Indian Cutting Tool Manufacturers’ Association and a member of Steering Committee at India Forum in SERI, Korea & India. He holds an MBA from University of Birmingham as well as BA in Business Administration from KNO University in South Korea. He was born in South Korea on 11 February, 1963.

In Person

An experience I won’t forget…

If not in auto industry where would you be? I wanted be a guitarist when I was middle school student, but realised I have no gift for music. My parent wanted me to be a court judge but I am an outgoing character instead of a bookworm. People thought I would be in the finance business when I was doing my MBA in the UK, but I am happy to stay in the current industry. Well, I might pursue one of above if I am not in current industry

What car do you drive? What do you dream of driving?My current car in the UK is BMW5 and Innova in India. I have been driving the Innova for a few Sundays when the Indian roads are very quiet, however, I am driving the BMW myself in the UK at all times. I’d like be seated on the back seat of the Rolls Royce phan-tom, but not on driver seat!

Your most recent indulgence…One Sunday, bravely switch off mobile phones, and laptop computers and then relaxing as children; eating, watching TV with very comfortable wear

What are you currently reading?I usually read multiple books simultaneously: an autobiography of a previous Korean president at home and modern history of India on business trips

What is Chris You doing when not talking auto?I would very much like to learn about the Indian culture. It is exciting to try because everything is new to me—foods, public transportation, amenities etc. I have a little opportunity because most of my movement is for business purposes, however, I have experienced the Delhi metro alone, visited 40 Indian cities, attended many wedding ceremonies, and many provinces’ local foods

Outdoor activity you would miss office for…Golf. I usually played golf in the UK on Saturdays with friends and Sundays with my wife, but India is too hot for me and my wife

Where did you go for your last holiday?I went to Austria with my family—we stayed Salzburg and Vienna, both are absolutely beautiful cities. Famous operas and street musicians give us pleasures equally

You get angry when?If a staff answer is “B” when I ask “A”, particularly if the staff tries to hide the company’s problem

Seeing the Taj Mahal, which is difficult to explain in words; another one—the Hyderabad biryani was too spicy!!

What is the one thing you would like to change about you?Balance between work and family life—I have worked days and nights due to time differences of Europe, India, and Korea. Hopefully soon, I would have little more time for my family than before

Best thing to have happened to you…I walked with my family around holiday places in very casual clothes, without much thinking, almost like one of the three idiots. It is a perfect feeling of freedom!

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